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Thursday, 27 June 13
US COAL EXPORTS BEATS CHINESE COAL IMPORTS AS THE MOST INFLUENTIAL COAL TRADE - BIMCO
 The influence of American coal exports on seaborne transportation has grown significantly over the past decade. In 2002, the US exported 20.1 million tons by sea, but in 2012 that number had increased to 106.7 million tons. The effect on shipping has multiplied due to the fact that much of the demand growth has come from East Asian countries. With a large part of the US Coal destined for East Asia being shipping out of the US East Coast ports, this will increase the demand for tonnage.
Chief Shipping Analyst at BIMCO, Peter Sand, says: “As a consequence, the transportation demand stemming from US coal exports has surged from 84.7 billion tonne-miles in 2002 to an estimated 707.3 billion tonne-miles in 2012 (835% over the period). In comparison, the Chinese coal imports in 2012 accounted for an estimated 697.6 billion tonne-miles of demand for seaborne transportation. This means the US coal exports was more important to the dry bulk shipping market than the Chinese coal imports in 2012”.
Dissection of the US coal exports
The US exported 22.0 million tons of coal to the East Asian countries of South Korea, Japan and China in 2012, of which 5.1 million tons came from Pacific ports. The Pacific ports export thermal coal to East Asia, while the US East coast and Gulf coast (USEC/USGC) ports export both thermal coal and coking coal. Of the total 22.0 million tons exported to East Asia in 2012, coking coal made up 14.9 million tons (68%) and thermal coal made up 7.1 million tons (32%). 40% of the coal exported to East Asia came from Baltimore, a Capesize-accommodating port that attracts Asian buyers, who also has to accept an extended distance of more than 14,000 nautical miles to reach the port of discharge. Likewise, the US exported 51.3 million tons of coal to the EU in 2012. The main destinations were the Netherlands and the UK with a total of 23.1 million tons. A part of the coal exports to the Netherlands are subsequently transhipped to German buyers. Traditionally, most of the European trade has been for coking coal, but 2012 marked the year where this pattern changed. In 2012, the US exported 27.9 million tons of thermal coal to the EU (54%), but only 23.4 million tons of coking coal (46%). Unlike the exports going to East Asia, all coal exports to Europe came from USEC/USGC ports making the transit distances substantially shorter. The result is that the exports to East Asia are more beneficial for the shipping industry than the exports to the European Union, despite involving much lower volumes.
Thermal coal exports – Reflecting a new energy market in the US
The increased thermal coal exports is explained by the large-scale exploitation of unconventional fuels in the US, which has made consumption of domestic oil and gas relatively cheaper. The average Brent-WTI spread went from nothing to around USD 17 per barrel during 2011 and 2012, while domestic US natural gas prices have halved since mid-2000s.
As a consequence, the domestic consumption of coal fell by 11% to 807.8 million tons in 2012. Since the production only fell by 7.2% to 922.1 million tons, the potential for exports has increased. Meanwhile, European gas-driven power plants suffer from oil-indexed contracts and higher oil prices, making coal the cheapest option for energy in Europe. Working in the same direction was the “collapsing” carbon prices within the EU ETS which only made the appetite for coal more significant. “Back loading” or not in the EU ETS, this is probably going to be the case also in the coming years. The low freight rates during the past two years have also been an incentive for importing coal from countries far away such as the US and Colombia. The thermal coal to East Asia is primarily shipped to South Korea, who has virtually no coal mining industry. The increased South Korean demand for US coal originates from a desire to diversify trading partners to manage rising coal costs.
Coking coal exports – a matter of Chinese steel production
Coking coal demand in East Asia has largely been a result of an increased Chinese steel production. The Chinese steel output in 2012 was four times larger than in 2002, while the production in Japan and South Korea has remained relatively unchanged. As a consequence, China has increased its imports of coking coal, which has benefitted the US as well.
South Korea has traditionally imported coking coal from Australia, Canada and China. However, due to the Chinese domestic demand, South Korean steel mills have to source their coal elsewhere than China, which has benefitted exporting countries such as the US and Russia. Japan has imported less coking coal post-2008, but the country has increased its coking coal imports from the US as a substitute for Australian coking coal, which means that the distances travelled increase fourfold.
In the EU, seaborne coking coal demand has been relatively stable over the last decade, but a larger share is being sourced from the US. In 2002, the US exported 9.9 million tons to the European Union; in 2012, the number had increased to 23.4 million tons. The increased demand for coking coal came from Germany and the Netherlands in particular, but also from Italy, France and the UK. Outlook Looking forward, India could become a medium-term growth factor as the country has experienced very high demand growth for US coal during the past five years. The US exported 6.4 million tons to India in 2012 – all shipped from USEC/USGC ports. Back in the US there are talks about building a large coal export terminal at Cherry Point, state of Washington or in the state of Oregon. One proposal, at Cherry Point near the Canadian border on the West Coast, plans to have a capacity of 48 million tons per year. The terminals would accommodate the large thermal coal reserves in Montana and Wyoming. Out of the 431.1 million tons of thermal coal produced in 2011 in these states, only 15.5 million tons were exported (source: EIA). The terminals are being built to meet the increasing demand for coal-fired power generation in East Asia, and at full capacity, the Cherry Point terminal would create employment for 40 Capesize vessels on an annualised basis. We expect to see a surge in exports if the terminals are built. US thermal coal exports to East Asia in April were slightly up from the same month last year (8%), but down by 24% from the month before which represented an all-time-high in total coal exports. Coking coal is more of a joker, as the April numbers throw a wet blanket over the party. Coking coal exports to East Asia were substantially down from the same month last year (-40%) as well as from last month (-44%). Sources attribute this to lower GDP growth in China combined with a massive oversupply of coal in East Asia. Some analysts therefore expect US coal exports to be 10-15% lower this year compared to last year.
Another potential threat comes from the talks of a Chinese ban on high-sulphur and low-calorific coal, as much of the US coal going to China has a high content of sulphur. In 2012, China imported 8 million tons of coal with sulphur content above 1%. It is however uncertain if Beijing will ratify the coal ban. However the US has lots of low sulphur coal reserves to substitute the high sulphur coal if it is demanded.
“When we look into the future, global demand for thermal and coking coal is set for solid growth with thermal coal being in the driving seat both in terms of volume and percentage growth. If the US can stay price competitive in the market and scale up Pacific port capacity, the longer sailing distances are likely to benefit dry bulk shipping demand along the road” adds Peter Sand.
Source: BIMCO / Hellenic Shipping News
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Sunday, 01 September 13
INDONESIA TO INDIA SPOT FREIGHT STAYS FIRM THIS WEEK - VISTAAR
COALspot.com: The freight market continued to be firm with even though the BDI and Cape index dropped by about 3 pct week on week.
The BDI was do ...
Friday, 30 August 13
US COAL PRODUCTION FELL 0.48 PERCENT WEEK ON WEEK - EIA
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 20.70 million short tons (mmst) of ...
Thursday, 29 August 13
HANDY: THE PACIFIC MARKET STARTED HEALTHY THIS WEEK - FEARNRESEARCH
Handy
The Pacific market started healthy this week. We have seen many bauxite, iron ore and few coal fixtures. Ships passing Singapore were able to ...
Thursday, 29 August 13
NO RATING IMPACT ON INDONESIAN ENERGY COMPANIES FROM RUPIAH DEPRECIATION - FITCH RATINGS
Fitch Ratings says the credit profiles of rated Indonesian energy and utilities companies, including thermal coal producers, will largely remain una ...
Wednesday, 28 August 13
THE BDI HAS MOVED TO LEVELS CONSIDERABLY STRONGER THAN THE BEGINNING OF THE YEAR - INTERMODAL
By George Bassakos
SnP Broker - Intermodal
We have already reached the end of August and whilst students are preparing themselves for another sc ...
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- Australian Commodity Traders Exchange
- Jindal Steel & Power Ltd - India
- OPG Power Generation Pvt Ltd - India
- Makarim & Taira - Indonesia
- Ministry of Mines - Canada
- Kapuas Tunggal Persada - Indonesia
- Videocon Industries ltd - India
- Miang Besar Coal Terminal - Indonesia
- Georgia Ports Authority, United States
- Grasim Industreis Ltd - India
- GAC Shipping (India) Pvt Ltd
- Intertek Mineral Services - Indonesia
- Trasteel International SA, Italy
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mjunction Services Limited - India
- McConnell Dowell - Australia
- Bangladesh Power Developement Board
- Price Waterhouse Coopers - Russia
- Coalindo Energy - Indonesia
- The Treasury - Australian Government
- Australian Coal Association
- CNBM International Corporation - China
- Sical Logistics Limited - India
- Bulk Trading Sa - Switzerland
- Barasentosa Lestari - Indonesia
- Bharathi Cement Corporation - India
- Tamil Nadu electricity Board
- Bhushan Steel Limited - India
- Kepco SPC Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Therma Luzon, Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Energy Link Ltd, New Zealand
- Baramulti Group, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Energy Development Corp, Philippines
- South Luzon Thermal Energy Corporation
- Maharashtra Electricity Regulatory Commission - India
- Larsen & Toubro Limited - India
- Sakthi Sugars Limited - India
- Bukit Baiduri Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Interocean Group of Companies - India
- Romanian Commodities Exchange
- Jaiprakash Power Ventures ltd
- Alfred C Toepfer International GmbH - Germany
- The State Trading Corporation of India Ltd
- Siam City Cement - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- SMC Global Power, Philippines
- Cigading International Bulk Terminal - Indonesia
- Formosa Plastics Group - Taiwan
- Gujarat Mineral Development Corp Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Transport, Egypt
- Uttam Galva Steels Limited - India
- Altura Mining Limited, Indonesia
- Posco Energy - South Korea
- PTC India Limited - India
- Central Java Power - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Kumho Petrochemical, South Korea
- PNOC Exploration Corporation - Philippines
- Savvy Resources Ltd - HongKong
- International Coal Ventures Pvt Ltd - India
- Cement Manufacturers Association - India
- Mercuria Energy - Indonesia
- Thiess Contractors Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Renaissance Capital - South Africa
- Karbindo Abesyapradhi - Indoneisa
- Vizag Seaport Private Limited - India
- Manunggal Multi Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Sojitz Corporation - Japan
- Latin American Coal - Colombia
- Malabar Cements Ltd - India
- GVK Power & Infra Limited - India
- IHS Mccloskey Coal Group - USA
- Samtan Co., Ltd - South Korea
- Semirara Mining Corp, Philippines
- Port Waratah Coal Services - Australia
- Indian Energy Exchange, India
- Coastal Gujarat Power Limited - India
- Lanco Infratech Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Medco Energi Mining Internasional
- Chettinad Cement Corporation Ltd - India
- Agrawal Coal Company - India
- Economic Council, Georgia
- Meralco Power Generation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Aboitiz Power Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Orica Australia Pty. Ltd.
- Wood Mackenzie - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Kideco Jaya Agung - Indonesia
- Karaikal Port Pvt Ltd - India
- Edison Trading Spa - Italy
- Bhatia International Limited - India
- Attock Cement Pakistan Limited
- Petron Corporation, Philippines
- Aditya Birla Group - India
- Iligan Light & Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- AsiaOL BioFuels Corp., Philippines
- Mercator Lines Limited - India
- Essar Steel Hazira Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Makmur.PT - Indonesia
- Toyota Tsusho Corporation, Japan
- Bayan Resources Tbk. - Indonesia
- ICICI Bank Limited - India
- Leighton Contractors Pty Ltd - Australia
- Ceylon Electricity Board - Sri Lanka
- Riau Bara Harum - Indonesia
- Indika Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Borneo Indobara - Indonesia
- TeaM Sual Corporation - Philippines
- Coal and Oil Company - UAE
- Independent Power Producers Association of India
- Maheswari Brothers Coal Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Thai Mozambique Logistica
- Central Electricity Authority - India
- Electricity Generating Authority of Thailand
- Chamber of Mines of South Africa
- Antam Resourcindo - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- LBH Netherlands Bv - Netherlands
- Pipit Mutiara Jaya. PT, Indonesia
- GMR Energy Limited - India
- Binh Thuan Hamico - Vietnam
- Neyveli Lignite Corporation Ltd, - India
- IEA Clean Coal Centre - UK
- Minerals Council of Australia
- SN Aboitiz Power Inc, Philippines
- Power Finance Corporation Ltd., India
- Heidelberg Cement - Germany
- PowerSource Philippines DevCo
- White Energy Company Limited
- Sree Jayajothi Cements Limited - India
- Global Green Power PLC Corporation, Philippines
- Commonwealth Bank - Australia
- Globalindo Alam Lestari - Indonesia
- Deloitte Consulting - India
- Electricity Authority, New Zealand
- Anglo American - United Kingdom
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Eastern Coal Council - USA
- Indogreen Group - Indonesia
- Eastern Energy - Thailand
- Semirara Mining and Power Corporation, Philippines
- Dalmia Cement Bharat India
- Vedanta Resources Plc - India
- Marubeni Corporation - India
- ASAPP Information Group - India
- Indonesian Coal Mining Association
- Rio Tinto Coal - Australia
- Standard Chartered Bank - UAE
- Madhucon Powers Ltd - India
- Ambuja Cements Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Africa Commodities Group - South Africa
- CIMB Investment Bank - Malaysia
- Tata Chemicals Ltd - India
- Salva Resources Pvt Ltd - India
- Parry Sugars Refinery, India
- MS Steel International - UAE
- Wilmar Investment Holdings
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mintek Dendrill Indonesia
- Singapore Mercantile Exchange
- New Zealand Coal & Carbon
- TNB Fuel Sdn Bhd - Malaysia
- Sindya Power Generating Company Private Ltd
- Star Paper Mills Limited - India
- Global Business Power Corporation, Philippines
- London Commodity Brokers - England
- Parliament of New Zealand
- Simpson Spence & Young - Indonesia
- Ministry of Finance - Indonesia
- Siam City Cement PLC, Thailand
- The University of Queensland
- Orica Mining Services - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Oldendorff Carriers - Singapore
- Kaltim Prima Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- VISA Power Limited - India
- Meenaskhi Energy Private Limited - India
- Rashtriya Ispat Nigam Limited - India
- Pendopo Energi Batubara - Indonesia
- Kobexindo Tractors - Indoneisa
- Planning Commission, India
- Global Coal Blending Company Limited - Australia
- Gujarat Electricity Regulatory Commission - India
- Carbofer General Trading SA - India
- Timah Investasi Mineral - Indoneisa
- India Bulls Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Metalloyd Limited - United Kingdom
- Indian Oil Corporation Limited
- SMG Consultants - Indonesia
- Banpu Public Company Limited - Thailand
- Gujarat Sidhee Cement - India
- Xindia Steels Limited - India
- Goldman Sachs - Singapore
- San Jose City I Power Corp, Philippines
- Merrill Lynch Commodities Europe
- Kohat Cement Company Ltd. - Pakistan
- Indo Tambangraya Megah - Indonesia
- European Bulk Services B.V. - Netherlands
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